Correlation Between International Opportunity and Value Fund

Can any of the company-specific risk be diversified away by investing in both International Opportunity and Value Fund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining International Opportunity and Value Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Opportunity Portfolio and Value Fund Investor, you can compare the effects of market volatilities on International Opportunity and Value Fund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in International Opportunity with a short position of Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Opportunity and Value Fund.

Diversification Opportunities for International Opportunity and Value Fund

0.48

Correlation Coefficient

International Opportunity  Value Fund

Very weak diversification

The 3 months correlation between International and Value is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding International Opportunity Port and Value Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Investor and International Opportunity is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on International Opportunity Portfolio are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Investor has no effect on the direction of International Opportunity i.e., International Opportunity and Value Fund go up and down completely randomly.

Pair Corralation between International Opportunity and Value Fund

If you would invest  764.00  in Value Fund Investor on October 4, 2024 and sell it today you would earn a total of  6.00  from holding Value Fund Investor or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

International Opportunity Port  vs.  Value Fund Investor

International Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Opportunity Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, International Opportunity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Value Fund Investor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Value Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with International Opportunity and Value Fund

The main advantage of trading using opposite International Opportunity and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Opportunity position performs unexpectedly, Value Fund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Value Fund will offset losses from the drop in Value Fund's long position.

The idea behind International Opportunity Portfolio and Value Fund Investor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.